NYISO DER Roadmap MIWG

December 5th, 2016

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Agenda

Deployment Experience

Market Design Principles

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SolarCity is a national leader in solar, storage, and

grid services, with increasing NY presence

• 2,100+ MW of installed solar with

300,000+ customers

• 40+ MW of commercial and utility

storage over 140+ active projects

• Dozens of systems installed

• Ramping up storage deployments

nationally, and in New York

• Partnering with utilities on innovative

projects to deliver customer,

distribution, and transmission benefits

from storage and other DERs.

• Six NY Regional Warehouses

• Albany (2)

• Long Island (2)

• Orange County

• Westchester

• >800 NY employees

• Residential, Commercial,

Community, Municipal, Educational

Markets

• SolarCity Buffalo Manufacturing

Plant under construction; 1GW

annual production target

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Agenda

Deployment Experience

Market Design Principles

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(iv) Distributed Energy Resource with energy, AS and Capacity payments+ distribution service

(iii) Demand Response with energy, AS and Capacity Payment

(ii) Demand Response with energy payment only

(i) Load modifying resource

• DER compensated for distinct and incremental energy dispatch, capacity and ancillary services

• Receives compensation for net export

• e.g. NYISO DER roadmap

• DER compensated for distinct and incremental energy dispatch, capacity and ancillary services

• No compensation for net export

• e.g. PJM DR programs

• DER compensated for incremental dispatch

• No compensation for net export

• e.g. CAISO PDR

• DER offsets load and indirectly provides wholesale benefits

• e.g. ISO NE RNS application

Current vs Ideal Market Structures

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• NYISO Aggregation Discussion and Feedback:

• NYISO, “zonally aggregated dispatchable DER do not provide NYISO operators with the same flexibility and effectiveness (reliability and market efficiency) to solve constraints as transmission substation-level aggregations”

• NYISO believes all resources in the aggregation must be interconnected to the same transmission

substation and use

substation LBMPs

• Challenge:

• NYISO believes zonal

aggregations across

multiple nodes would be

difficult to manage

constraints and resources

within the zone

Market Design Principles (i) DER Aggregation

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DER aggregations should be flexible

i. Multi-pricing node aggregations may consist of different sub-resource

types (i.e., heterogeneous).

ii. Sub-resources in multi-pricing node aggregations may move in different

directions from an ISO dispatch instruction.

iii. Energy storage aggregations can operate in different modes (i.e.,

charging or discharging).

The aggregation must provide a net response at each of its

pricing nodes that is consistent with the ISO dispatch

instruction, and

The distribution of the aggregation’s response across its pricing

nodes must be consistent with applicable allocation factors that

the aggregation submits with its bid.

Market Design Principles (i) DER Aggregation

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Example 1

Market Design Principles (i) DER Aggregation

Source: CAISO DERP Draft Final Proposal

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Example 2:

Market Design Principles (i) DER Aggregation

Source: CAISO DERP Draft Final Proposal

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DERs should receive full compensation for generated energy

including energy that is exported to the grid

‒ Current market structures limited compensation to physical load which is

overly restrictive

Market Design Principles (ii) DER beyond DR – Net export compensation

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Po

wer

(kW

)

DR M&V Load Reduction Potential Battery Discharge

Bad example

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Behind-the-meter DER performance should be based on direct

metering and not synthetic baselines

‒ Baselines are inaccurate and introduce compensation and accuracy risks

Market Access Principles (iii) DER Metering and Verification

Good Example

CAISO Metering Generation Output for Proxy Demand Resource

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DERs should be allowed to provide multi-use applications in

wholesale and retail markets that are distinct and incremental

Resources are not being “compensated” twice for the same performance

when seeking attributes that are similar, but not identical

To the extent a resource earns revenue based on multiple services, and

prices for those services are established independently of each other,

there is no “double payment”

Market Access Principles (iv) Enable Multi-Use Applications

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Thank you